Which U.S. Bank Stock Is the Best Post-Earnings Bet?
Investing.com | Jul 20, 2023 11:30
- U.S. banks reported earnings this week
- Results were mixed, with some banks doing better than others
- Let's try and find out which bank would be the best pick post earnings
- JPMorgan Chase & Co. (NYSE:JPM): +35%
- Bank of America Corp. (NYSE:BAC): +11%
- Morgan Stanley (NYSE:MS): +2%
- Citigroup Inc. (NYSE:C): -1%
- The Goldman Sachs Group, Inc. (NYSE:GS): -8%
- Wells Fargo & Company (NYSE:WFC): +21%
- Revenue Growth (horizontal axis)
- Upside potential compared to Fair Value (vertical axis)
- Morgan Stanley has shown significant growth in recent years, but it is not accompanied by as much upside potential on the price side (based on fundamentals).
- Wells Fargo & Company and Bank of America Corp. are the two institutions with the greatest potential upside based on fair value.
- Goldman Sachs did not appear on the chart.
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Markets anticipate a challenging quarter for U.S. equities, with a projected 7.3% dip in EPS across the board. However, there's a glimmer of hope on the horizon as analysts predict this period to serve as a low point, paving the way for a potential earnings growth rebound.
The recent quarterly reports from major U.S. banks have been released, showing varied performance in net income and turnover. Here are the results:
Net income (% change YoY):
According to InvestingPro's updated Fair Values, the chart below highlights two crucial aspects:
Source: InvestingPro
Based on the updated Fair Values and a comparative chart available on InvestingPro, some important insights emerge:
Considering all factors, Wells Fargo & Company appears to be in the best health among the major banks (earning a 4/5 score on InvestingPro). Notably, it has shown an increase in revenues on the investment banking side, a distinction among its peers.
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Moreover, given its market size (5.7% compared to other banks' 15-20%), there seems to be more room for growth.
I'm gearing up to conduct a similar analysis of big techs soon, with a keen focus on Apple's (NASDAQ:AAPL) and Alphabet's (NASDAQ:GOOGL) turnovers as the main topics.
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